JSMR 17oct19 Rev.18 10 2019 - 02 53 53 - F45Rb

FOCUS | XXX
Company Update | XX XXXXX 2013

FOCUS | Jasa Marga
Re-Initiating Coverage | 17 October 2019
Mandiri Sekuritas Analyst Build, Connect, Boom!

Edbert Surya We re-initiate JSMR with a Buy rating and PT of 7,700. We think the firm’s EV/EBITDA
+6221 5296 9623 multiple shall expand, as ROIC turnaround is foreseeable in 2020, driven by
edbert.surya@mandirisek.co.id
moderating capex growth, toll road interconnectivity, and the firm’s initiatives of
Adrian Joezer tariff integration, which has boosted average revenue/car by 77%. The gradual
+6221 5296 9415 WACC decline from monetary easing should enlarge its ROIC’s spread to WACC
adrian.joezer@mandirisek.co.id
while favoring JSMR’s non-conventional financing schemes going forward.
Interconnectivity: After a series of massive We believe 2019 will be the end of capex
Sector : Tollroad
toll road development, JSMR’s new cycle series for JSMR, as we appreciate the
operating toll roads have started to bear company’s initiative to build the
fruits. Our finding on the newly connected Probolinggo–Banyuwangi (173 km) toll
BUY toll roads showed a significant upsurge in road in stages to minimize traffic’s risk.
Current Price Rp5,650 traffic by an average 17-128% compared to Inorganic growth from easing monetary
Target Price Rp7,700 (+36.3%) pre-connected state. This is undoubtedly and fiscal policies. JSMR is favored with
52-wk range Rp6,450 - Rp3,800 an answer to the concern over the the macro backdrop, both from fiscal
greenfield toll roads development by JSMR policies and easing monetary. The
in the past few years. upcoming 5% corporate income tax cut will
Stock Data
Tariff integration: Jasa Marga’s tariff provide a 6% upside to JSMR’s bottom line.
Bloomberg Code JSMR IJ integration (open system) strategy has Meanwhile, as BI has cut 75 bps interest
Mkt.Cap (Rp bn/US$ mn) 41,007 / 2,897 been proven to increase toll road revenues rate ytd, we see a limited downside risk of
Issued Shares (mn) 7,258 by 20-43%, driven by higher blended the potential increase in JSMR’s WACD. The
Avg. Daily T/O (Rp bn/US$ mn) 34.0/2.4 revenue/car. Tariff integration will also current relatively low bond yield of
create a multiplier effect on JSMR’s GIDN10YR would also lift up JSMR’s
biannual tariff adjustment, as it will be valuation on the lower risk free rate.
Major shareholder
based on the higher ground. Taking into Re-initiate with new TP of Rp7,700. JSMR
Government of Indonesia 70.0% account both connectivity and tariff is attractively trading at -1stdev 5-year
Public 30.0% integration, we estimate JSMR’s toll road mean at 13.7x EV/EBITDA 2020F. Our PT of
IRR to range 10-13%. Rp7,700 is based on DCF valuation until the
Entering a high EBITDA growth cycle. In concession ends. We expect JSMR’s
EPS consensus 2014-19F, the company will have built 398 earnings to record a 22% CAGR 2019-22F
Mansek Cons Diff
km with total capex of approx. Rp60tn. with accelerated earnings in 2021. Key risks
2019F 229.5 295.1 (22.2) Thus, combined with A-life program/e-toll to our call are lower-than-expected traffics
2020F 209.0 304.8 (31.4) implementation, we expect JSMR’s EBITDA and tariff adjustment, and higher than
2021F 274.5 346.4 (20.8) to grow 22% CAGR 2018-23F with EBITDA estimate capex.
margin to reach a new norm at 62% by
Share price performance 2022 (2019F: 57%).
FINANCIAL SUMMARY
3m 6m 12m YE Dec (Rp Bn) 2017A 2018A 2019F 2020F 2021F
EBITDA 4,863 5,590 5,979 8,159 8,901
Absolute (%) (4.6) (7.4) 28.1
Net Profit 2,200 2,203 1,666 1,517 1,992
Relative to JCI (%) (1.3) (2.7) 22.8 Fully-diluted EPS growth (%) 9.9 0.1 (24.4) (8.9) 31.4
P/E Ratio (x) 18.6 18.6 24.5 26.9 20.5
EV/EBITDA (x) 14.3 12.7 16.8 13.7 13.8
Dividend Yield (%) 1.4 1.1 1.1 0.8 0.7
ROAE (%) 15.3 13.8 9.5 8.1 10.0
Source: Company (2017-2018), Mandiri Sekuritas (2019-2021)
Please see important disclosure at the back of this report Page 1 of 31

This report is intended exclusively for Mandiri Sekuritas Research. Unauthorized distribution is prohibited.
FOCUS | Jasa Marga
Re-initiate JSMR with a Buy rating and PT of 7,700

By the time President Jokowi stepped in with infrastructure as his main agenda in 2014,
toll road development became one of the infra spotlights, as the Government particularly
targeted to connect Java island with the 616 km Trans Java toll road. Driven by such an
ambitious target, markets were previously concerned about three key points:
1. Greenfield toll road, in substance, implies potential completion delays and high
risk on traffic assumption, which would translate to lower-than-expected IRR.
2. Acceleration in toll road development indicated the beginning of JSMR’s capex
cycle.
3. Indonesia’s unfavorable macro economy condition with increasing BI rate trend
at +175bps and bond yield rose from 5.3% to 8.4% in 2013%.
We think all the aforementioned concerns were overdone, as 1) the newly operated toll
roads of JSMR had higher-than-expected IRRs, thanks to interconnectivity; 2) the peak of
capex cycle will be over in 2019, while on the positive flip side, JSMR’s operated toll roads
will increase from 576 km in 2014 to 1,011 km by 2020, including the most anticipated
Jakarta-Cikampek elevated toll road; 3) the company is poised to take the opportunity
from fiscal and monetary easing, translating to potentially higher earnings and valuation.
Interestingly, JSMR’s valuation is not demanding compared to its historical 5-year mean,
trading at -1stdev with one-year forward EV/EBITDA at 8.8x, and at -1stdev with one-year
forward PER 2020 at 18.5x. Although we expect JSMR’s earnings will only start to
accelerate in 2021 onward due to its high gearing, the company’s EBITDA will advance
22% CAGR in 2018-23F and ROIC will gradually improve, supported by solid top-line
growth from interconnectivity and tariff integration.
FIGURE 1. JSMR KEY VALUATION METRICS

Jasa Marga's metrics 2014 2015 2016 2017 2018 2019F 2020F 2021F
Operated toll road (km) 576 590 608 697 763 974 1,011 1,075
P/E 23.4 22.6 20.5 18.6 16.9 19.1 18.5 16.2
P/B 3.8 3.6 2.8 2.4 1.9 2.2 2.0 1.7
EV/EBITDA 12.4 11.6 10.5 11.0 9.5 10.8 8.8 7.7
Source: Bloomberg, Mandiri Sekuritas estimates
FIGURE 2. EV/EBITDA AND SPREAD BETWEEN ROIC AND WACC FIGURE 3. JSMR’S ROIC AND WACC
(%) (%)
(x) (%)
19.0% 17.5% 9.0%
14.0 9.0%
12.4 8.0%
11.6 8.0% 17.0%
12.0 11 10.8 15.1% 7.0%
10.5
7.7% 7.0%
9.5 15.0% 13.6% 6.0%
10.0 8.8 6.0%
6.5% 12.2% 5.0%
5.0% 13.0%
8.0 4.0%
4.6% 4.0% 11.0%
6.0 9.4% 9.3% 3.0%
3.0%
3.4% 9.0% 2.0%
4.0 2.0% 9.8% 7.6%
9.0% 8.6% 8.6% 8.8% 1.0%
1.0%
2.0 1.5% 7.0% 7.8% 7.8% 0.0%
0.8% 0.0%
5.0% -1.0%
0.0 ‐0.3% -1.0% 2014 2015 2016 2017 2018 2019 2020
2014 2015 2016 2017 2018 2019 2020
spread ROIC WACC
EV/EBITDA Spread between ROIC and WACC
Source: Bloomberg, Mandiri Sekuritas estimates Source: Bloomberg, Mandiri Sekuritas estimates

FOCUS | Jasa Marga
Organic Growth: Interconnectivity and Tariff Integration

Accelerated traffic growth in greenfield toll roads and an upsurge in JSMR’s toll
road revenue/car are predominantly driven by toll road connectivity and tariff
integration strategy, outweighing the low inflation environment. We revised up
our project IRR estimate to 10% - 13% as the biannual tariff adjustment will be
based on the higher ground, creating a multiplier effect on JSMR’s outlook.
Connectivity is Key
Jasa Marga will operate 974 km of toll roads by the end of 2019, including additional 398
km of new toll road in operation in the past 5 years. During the early years of Trans Java
toll road’s construction development, land acquisition issue led to delay in commercial
operation. However, we believe connectivity is key for the greenfield toll roads to ramp
up traffic growth.
We note several interconnectivity cases in Indonesia, such as when Solo–Ngawi segment

connected to Ngawi–Kertosono, and Ngawi–Kertosono connected to Kertosono–
Surabaya. Both toll roads surprised our initial 2019 traffic estimates by 103% and 132%,
respectively, as the first half figures have already surpassed our FY19 targets. The yellow
highlighted chart below marks the precise timeline of connected toll roads of the
aforementioned segments.
FIGURE 4. CONNECTIVITY IMPACT TO SOLO – NGAWI AFTER FIGURE 5. CONNECTIVITY IMPACT TO NGAWI–KERTSONO
CONNECTED WITH NGAWI - KERTOSONO AFTER CONNECTED WITH KERTOSONO - SURABAYA
Traffic (mn) Traffic (mn)
2.0
1.8 1.4
1.6 1.2
1.4 1.0
1.2 128% increase exc Lebaran
1.0 0.8 118% increase exc Lebaran
avg pre connected:
0.8 0.6 avg pre connected:
0.4mn
0.6 0.4 0.2mn
0.4
0.2 0.2
- -
Solo - Ngawi Ngawi - Kertosono
Source: Company, Mandiri Sekuritas estimates Source: Company, Mandiri Sekuritas estimates
First, regarding the Solo–Ngawi toll road, when it was connected to the Ngawi–Kertosono
segment in Nov’18, the traffic accordingly rose in the following month. We highlight a
significant traffic increase by an average of 128% in Solo–Ngawi post the connectivity,
excluding the one-off jump in June’19 due to Lebaran homecoming.
Second, a similar situation occurred when the Ngawi–Kertosono segment was linked to
Kertosono–Surabaya in Dec’18, as we noticed a sharp traffic increase in Ngawi–Kertosono
in the following month of Jan’19. The volume was relatively stable afterward, translating
to an average of 118% upside in traffic on Jan’19 onward, excluding the boom in Lebaran
homecoming.

FOCUS | Jasa Marga
We also highlight the impact of new sections’ connectivity with existing toll roads,
namely: Gempol–Pasuruan section III earlier this year and Surabaya–Mojokerto section IB-
III in early 2018, both of which also experienced traffic surges of 40% and 29%,
respectively, after fully connected. In addition, we note the connection between
Surabaya–Gempol and Gempol–Pandaan toll roads in 2015 translated to 17% traffic
upside to Surabaya–Gempol toll road.
FIGURE 6. CONNECTIVITY IMPACT TO GEMPOL–PASURUAN FIGURE 7. CONNECTIVITY IMPACT TO SBY–MOJOKERTO AFTER

AFTER CONNECTED WITH SECTION III CONNECTED WITH SECTION IB - III
1.2 2.5
29% increase excl
1.0 2.0 Lebaran
Avg. Pre
0.8 40% increase excl Lebaran Connected: 1.5
Avg. Pre 1.5
0.6 Connected: 0.4
1.0
0.4
0.2 0.5
- -
Gempol - Pasuruan Surabaya-Mojokerto
FIGURE 8. CONNECTIVITY IMPACT TO MEDAN–KUALANAMU– FIGURE 9. CONNECTIVITY IMPACT TO SURABAYA–GEMPOL

TEBING TINGGI AFTER CONNECTED WITH BELMERA AFTER CONNECTED WITH GEMPOL PANDAAN
1.8 30.0
34% avg increase 17% avg increase
1.6
25.0 Avg. Pre Connected: 20.7
1.4 Avg. Pre Connected:
1.2 1.1 20.0
1.0
15.0
0.8
0.6 10.0
0.4
5.0
0.2
0.0 0.0
4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16
Medan - Kualanamu - Tebing Tinggi Surabaya - Gempol
This connectivity effect did not only happen in the Trans Java toll road, since a similar
situation of connectivity also happened in Medan–Kualanamu–Tebing Tinggi (MKKT) and
Belawan–Medan–Tanjung Morawa (Belmera) toll roads, which are both parts of the Trans
Sumatera toll road. In this case, MKKT toll road’s traffic went up by an average of 34%
compared to before connected with Belmera toll road.
The next connectivity of JSMR will materialize in JORR 2 toll road, a second liner Jakarta
outer ring road to connect to Greater Jakarta area. The connectivity will consist of the
following:
- Cengkareng–Kunciran (14.2 km),
- Kunciran–Serpong (11.2 km),
- Serpong–Cinere (10.1 km).

FOCUS | Jasa Marga
The aforementioned toll roads will be connected with the existing JORR toll road. These
toll roads are expected to be complete by 4Q19, while the short segments of Serpong–
Cinere (3.6 km) and Kunciran–Cengkareng (14.2 km) will be completed by 2020. Thus, we
might expect the full impact of connectivity will only happen in 2020, since the Kunciran–
Cengkareng toll road is one of the key segments in JORR 2 development due to its
connection to Soekarno-Hatta airport.
FIGURE 10. JORR 2 DEVELOPMENT PLAN MAP
Source: BPJT
Tariff Integration to Lift Up the Overall Revenues
We think Jasa Marga is one of the utility companies Indonesia which is able to unlock its
value through organic growth strategy, such as tariff integration system or open system
implementation. To refresh, open system transaction is changing the users’ payment
system from multiple toll layers into one at the entrance gate. We think through this
strategy, Jasa Marga has been able to reduce heavy traffic congestion without decreasing
its toll road revenues collection due to higher average ticket-size.
What did we learn from the tariff integration implementation? To date, the company has
implemented open system in its five toll roads: 1) Jakarta – Tangerang; 2) Jagorawi, 3)
Semarang; 4) JORR; 5) Jakarta – Cikampek, which combined 45% of JSMR’s total revenues
and 50% of total traffic. We breakdown each toll roads which have applied the tariff
integration system, such as follows:
1. Jakarta–Tangerang toll road, implementing tariff integration in 2Q17. One of JSMR’s

mature toll roads (completed in 1984), contributing 10% of JSMR’s 2019 traffic
volume and 8% of toll road revenues. Ever since the company has applied the open
system in this toll road, Jakarta – Tangerang toll road’s revenues grew by 43%, as its
avg. revenue/car accelerated by 36%.

FOCUS | Jasa Marga
FIGURE 11. JAKARTA – TANGERANG TARIFF INTEGRATION FIGURE 12. JAKARTA – TANGERANG TARIFF INTEGRATION
IMPACT TO REVENUE/CAR IMPACT TO REVENUES
Revenue (mn)
Revenue/Car ('000)
7 250
+43% avg increase
+36% avg increase
6
200
5
Avg. Pre Integration: 4.53 Avg. Pre Integration: 146.7
150
4
3
100
2
50
1
0 0
Jakarta - Tangerang Jakarta - Tangerang
FIGURE 13. JAKARTA–TANGERANG TARIFF INTEGRATION ASP FIGURE 14. JAKARTA–TANGERANG TARIFF INTEGRATION
AND TRAFFIC GROWTH REVENUES AND GROWTH
(IDR) (%) (IDRbn) (%)
8,000 6% 6% 7% 1,200 35%
30%
7,000 6% 30%
5% 1,000
6,000 4% 25%
3% 3% 3% 4% 800
5,000 3% 20%
2% 3% 14% 14%
4,000 2% 600 13% 10% 15%
10%
7,007
6,577
6,578
9%
6,174
6,175
1%
5,677
3,000 10%
400
4,447
0% 3%
3,991
3,906
2,000 5%
‐2% ‐1% 200
1,000 ‐2% 0%
‐2%
0 ‐3% 0 ‐5%
2014 2015 2016 2017 2018 2019F 2020F 2021F 2022F 2014 2015 2016 2017 2018 2019F 2020F 2021F 2022F
ASP Traffic growth (%) Revenues growth (%)
2. Jagorawi toll road, implementing tariff integration in 3Q17. One of JSMR’s mature toll
roads (completed in 1978), contributing 11% of JSMR’s traffic volume and 7% of toll
road revenues. We saw a dramatic increase by 86% revenue/car in the following
quarters, translating to revenues increase in Jagorawi’s toll road by 34% on average
after the implementation of tariff integration.
FIGURE 15. JAGORAWI TARIFF INTEGRATION IMPACT TO FIGURE 16. JAGORAWI TARIFF INTEGRATION IMPACT TO
REVENUE/CAR REVENUES
Revenue/Car ('000) Revenue (mn)
12 400
350
10
300
8 +34% avg increase

250
+86% avg increase
6 200 Avg. Pre Integration: 170.8
150
4 Avg. Pre Integration: 3.32
100
2 50
0 0
Jagorawi Jagorawi

FOCUS | Jasa Marga
FIGURE 17. JAGORAWI TARIFF INTEGRATION ASP AND TRAFFIC FIGURE 18. JAGORAWI TARIFF INTEGRATION REVENUES AND
GROWTH ASP FORECAST
(IDR) (%) (IDRbn) (%)
7,000 2% 2% 2% 2% 5% 1,200 25% 30%
1% 1% 0%
6,000 25%
0% 1,000
20%
5,000
‐8% ‐5% 800 12%
11% 9% 15%
4,000 9%
‐10% 600 10%
6,241
5,866
5,858
5,499
5,507
3,000
2% 2% 5%
4,613
‐15% 400 0%
2,000
3,371
3,061
3,029
0%
‐22% ‐20% 200 ‐7%
1,000 ‐5%
‐ ‐25% ‐ ‐10%
2014 2015 2016 2017 2018 2019F 2020F 2021F 2022F 2014 2015 2016 2017 2018 2019F 2020F 2021F 2022F
3. Semarang toll road, implementing tariff integration in 2Q18. One of JSMR’s mature
toll roads (completed in 1983), contributing 3% of JSMR’s traffic and 2% of toll road
revenues. Since the implementation of open system, the average revenue/car has
risen by 106%, leading to total revenues jumped by 38% on the following quarters.
FIGURE 19. SEMARANG TARIFF INTEGRATION IMPACT TO FIGURE 20. SEMARANG TARIFF INTEGRATION IMPACT TO TOLL
REVENUE/CAR ROAD REVENUES
Revenue (mn)
Revenue/Car ('000)
7 60
+106% avg increase +38% avg increase

6 50
5
4
30

20
2
10
1
0
0 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19
3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 Semarang
Semarang
FIGURE 21. SEMARANG TARIFF INTEGRATION ASP AND TRAFFIC FIGURE 22. SEMARANG TARIFF INTEGRATION REVENUES AND
GROWTH ASP FORECAST
(IDR) (%) (IDRbn) (%)
5,000 10% 200 25%
5% 21%
4,500 3% 2% 2% 2% 2% 5% 180
20%
4,000 ‐1% 160 15%
0%
3,500 ‐5% 140 9% 15%
‐5% 9%
3,000 120 10%
6%
2,500 ‐10% 100
4,569
4,295
4,289
4,031
4,026
2,000 80 2% 2% 2% 5%
‐15%
2,651
2,640
1,500 60 0%
2,255
2,224
‐24% ‐20% ‐5%

1,000 40
‐25% ‐5%
500 20
‐ ‐30% ‐ ‐10%
2014 2015 2016 2017 2018 2019F 2020F 2021F 2022F 2014 2015 2016 2017 2018 2019F 2020F 2021F 2022F

FOCUS | Jasa Marga
4. JORR toll road, implementing tariff integration in 3Q18. One of JSMR’s mature toll
roads, contributing 9% of JSMR’s traffic volume and 11% of toll road revenues. The
open system application has translated to surge revenue/car by 135% on average in
the following quarters, which translates to increase 20% avg revenues in overall.
FIGURE 23. TARIFF INTEGRATION IMPACT TO JORR ASP AND FIGURE 24. TARIFF INTEGRATION IMPACT TO JORR REVENUE
TRAFFIC GROWTH
Revenue (mn)
Revenue/Car ('000)
3 70
+135% avg increase
60 +20% avg increase
3
50
40
2
30
Avg. Pre Integration: 0.96
1
20
1 10
0 0
4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19
JORR
JORR
FIGURE 25. JORR - TARIFF INTEGRATION ASP AND TRAFFIC FIGURE 26. JORR - TARIFF INTEGRATION REVENUES AND ASP
GROWTH FORECAST
(IDR) (%) (IDRbn) (%)
10,000 40% 1,400 12% 15%
27% 9%
9,000 30% 9%
1,200 10%
8,000
20%
7,000 1,000
1% 2% 2% 5%
6,000 2% 3% 2% 2% 2% 2% 10% 1%
800
‐2%
9,515
5,000 0% 0%
8,933
8,932
8,384
8,385
4,000 600
‐10%
6,667
6,045
‐5%
5,782
5,305
3,000 ‐25% 400

‐20%
2,000 ‐10%
‐36% ‐30% 200 ‐13%
1,000
‐ ‐40% ‐ ‐15%
2014 2015 2016 2017 2018 2019F 2020F 2021F 2022F 2014 2015 2016 2017 2018 2019F 2020F 2021F 2022F
5. Jakarta–Cikampek toll road, implementing tariff integration in 2Q19. Lastly, the

company has implemented open system at Jakarta–Cikampek toll road, also one
of the mature toll roads with 12% traffic and 12% toll road revenues
contribution. As the company has just started implementing tariff integration in
May’19, we think the impact will be fully priced in the 3Q19 onwards. On the
back of the envelope, we estimate there is an approx. 20% upside in overall
revenues..

FOCUS | Jasa Marga
FIGURE 27. TARIFF INTEGRATION IMPACT TO JAKARTA– FIGURE 28. TARIFF INTEGRATION IMPACT TO JAKARTA–
CIKAMPEK TOLL ROAD’S TRAFFIC CIKAMPEK TOLL ROAD’S REVENUE
Revenue (mn)
Revenue/Car ('000)
9 400
+20% avg
8 increase 350 0% avg
increase
7 300
6
250
5
200
4
150
3
100
2
50
1
0 0
2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19
Jakarta - Cikampek
Jakarta - Cikampek
FIGURE 29. JAKARTA–CIKAMPEK TRAFFIC FORECAST AND FIGURE 30. JAKARTA–CIKAMPEK TARIFF INTEGRATION
GROWTH AFTER TARIFF INTEGRATION REVENUES AND ASP FORECAST
(IDR) (%) (IDRbn) (%)
9,000 5% 6% 1,400 15%
3% 4% 11%
8,000 2% 1,200
2% 8% 10%
7,000 6%
‐2% ‐2% ‐2% 0% 1,000
6,000 5% 4%
‐2% 800 3% 5%
5,000
‐4% ‐1%
7,825
7,779
4,000 ‐1%
7,325
7,282
‐7% ‐7% ‐6% 600 0%

6,361
6,160
5,579
3,000
5,293
4,981
‐8% 400
2,000 ‐12% ‐10% ‐5%
1,000 200 ‐9%
‐12%
‐ ‐14% ‐ ‐10%
2014 2015 2016 2017 2018 2019F 2020F 2021F 2022F 2014 2015 2016 2017 2018 2019F 2020F 2021F 2022F
From the list above, it can be concluded that tariff integration is not lowering JSMR’s
revenues, as we think some short trip toll users are willing to pay the higher tariff instead
of driving through the almost traffic deadlock in conventional roads.
Going forward, we believe there are several toll roads that can apply the open system,
such as at the Surabaya toll road (Surabaya–Gempol, Surabaya–Mojokerto), Jakarta–
Cikampek toll road, and the upcoming JORR 2 toll road, while the trans Java toll road’s
integration would need further coordination with the other concession holders.
We have not priced in the tariff integration in other JSMR’s potential toll roads, however,
we highlight the biannual tariff adjustment of the existing open system toll roads will
be based on the higher norm. That being said, the cumulative of tariff adjustment in the
long-term will create a multiplier effect to the company, resulting in a 20-50% upside
opportunity compared to the previous closed system’s condition with the assumption of
stable traffic volume.

FOCUS | Jasa Marga
FIGURE 31. JASA MARGA’S AVG QUARTERLY REVENUE/CAR – PRE AND POST TARIFF
INTEGRATION
IDR'000/car
8 7.6 9.0%
20%
7 8.8%
6.1 6.2 6.3
36% 8.6%
6 86% 5.6
106%
5 4.5 8.4%
4 inflation 2-yr 8.2%

3.3
adjusted: 8%
3 2.7 8.0%
135% 2.2
2 7.8%
1.0
1 7.6%
0 7.4%
Jakarta - Tangerang Jakarta-Bogor-Ciawi Semarang JORR Jakarta - Cikampek
Pre tariff integration Post tariff integration Inflation
Source: Company, Mandiri Sekuritas estimates
Therefore, we believe both connectivity and tariff integration will greatly improve JSMR’s
long-term outlook, so we estimate JSMR’s toll road project’s IRR will range 10-13%. Below
is the summary table of our new IRR estimation:
FIGURE 32. JAS A MARGA’S TOLL ROADS PROJECT IRR SUMMARY

Toll Road Segments Mansek's new IRR Mansek's old IRR
Pandaan - Malang 12.4% 10.7%
Manado - Bitung 11.1% 9.7%
Batang - Semarang 12.1% 10.3%
Cengkareng - Kunciran 12.2% 10.8%
Kunciran - Serpong 12.0% 12.8%
Cinere - Serpong 12.1% 12.9%
Balikpapan - Samarinda 11.9% 10.0%
Jakarta - Cikampek South 12.9% 11.7%
Jakarta - Cikampek Elevated 12.5% 10.1%
Solo - Ngawi 12.7% 12.3%
Ngawi - Kertosono 12.4% 12.2%
Medan - Kualanamu - Tebing Tinggi 12.0% 11.8%
Gempol - Pasuruan 11.4% 10.3%
Probolinggo-Banyuwangi 10.2% 9.4%
Surabaya - Mojokerto 12.7% 14.1%
Semarang - Solo 10.4% 10.4%
Nusa - Benoa 10.7% 12.9%
JORR W2 North 12.8% 16.0%
BORR 12.5% 12.8%
Gempol - Pandaan 11.8% 11.4%
Source: Mandiri Sekuritas estimates

FOCUS | Jasa Marga
Entering a High EBITDA Growth Cycle

As a utilities company, Jasa Marga is one of its kind due to its defensive business
model in nature, organic growth strategy, and creative cost efficiency program.
Furthermore, having passed the peak capex cycle this year, Jasa Marga is now
entering a high EBITDA growth stage with 22% CAGR 2018-23F in our estimate.
Defensive revenues stream in nature. As the oldest toll road operator in Indonesia with
41 years of experience, Jasa Marga can be considered one of the most defensive
companies in Indonesia. The company’s top-line has steadily grown 12% CAGR 2006-
2018, thanks to its biannual tariff adjustment (inflation based structure). Considering
packed traffic and detour path in conventional roads, along with inadequate public
transportation, we think people would be willing to pay the toll road’s premium.
However, due to its business nature in toll roads, the company has to expand its toll
road’s length and develop new toll roads in order to enlarge its revenue-base. In other
words, capex is naturally a foundation for growth in the toll road business. The company
has spent Rp60tn capex over the past 5 years to build an additional 398 km of new toll
roads (2014: 576 km), which would translate to a better revenue generation.
FIGURE 33. JSMR’S SOLID REVENUES AND TRAFFIC GROWTH

IDRbn
20,000
18,000
16,000
14,000
12,000
10,000
8,000
6,000
4,000
2,000
-
Source: Companny, Mandiri Sekuritas estimates
We expect toll road revenues from subsidiaries to contribute 38% of total toll road
revenues in 2021F compared to only 14% in FY18 due to traffic ramp up from
connectivity effect. Furthermore, JSMR’s dependency on greater Jakarta toll roads will
taper off as the non-greater Jakarta toll road will contribute 40% of the total revenues.
The short term catalyst will derive from the Jakarta–Cikampek II elevated toll road (JaPek II
elevated), which will be complete in Dec’19 and is an extension of the existing Jakarta–
Cikampek toll road. We think the existing JaPek toll road’s traffic will gradually recover, as
it previously dropped due to heavy traffic caused by construction works. On the
conservative approach, we cut the existing Jakarta-Cikampek toll road’s traffic by 7%
CAGR 2017-21F as we assume the traffic will be split with the new JaPek II elevated.
We take into account JaPek II’s revenues recognition starting in 2020 at Rp908bn (7%
revenues addition to JSMR’s top-line), as we believe the whole month of Dec’19 will be
used for trial- commercial operation. We have not priced in the potential tariff integration
between the existing Jakarta–Cikampek toll road and JaPek II elevated, as it is still being

FOCUS | Jasa Marga
discussed, although we believe it is plausible due to high average ticket size of the
elevated one.
Moreover, we expect the extension of the Jakarta Outer Ring Road (JORR 2) will provide
an additional 7% for JSMR’s revenues in 2020, since we think the traffic volume will
accelerate when the toll roads are fully connected.
Regarding the Jakarta–Cikampek South II toll road, we assume it will start its commercial
operation in 2022, boosting JSMR’s topline by 8%, while proportionally recognizing the
Probolinggo–Banyuwangi toll road’s revenues in 2023, as the company will develop the
toll road in stages to assess the demand on the surrounding area. In the first
development phase, JSMR will build the Probolinggo–Jember segment (30 km). We think
this approach is reasonable in order to minimize traffic risk, while also easing the huge
capex prerequisite.
FIGURE 34. JSMR’S ONE-YEAR FORWARD PE BAND FIGURE 35. JSMR’S ONE-YEAR FORWARD EV/EBITDA BAND
PE (x) EV/EBITDA (x)
28.0 15.0
26.0 +2 StDev 14.0
+2 StDev
24.0 13.0
+1 StDev +1 StDev
22.0 12.0
20.0 Mean 11.0 Mean
18.0 10.0
-1 StDev -1 StDev
16.0 9.0
14.0 -2 StDev 8.0 -2 StDev
12.0 7.0
10.0 6.0
Jul-13
Jul-14
Aug-15
Aug-16
Jul-13
Jul-14
Aug-15
Aug-16
Jan-13
Jan-14
Mar-17
Sep-17
Mar-18
Sep-18
Apr-19
Oct-19
Jan-13
Jan-14
Mar-17
Sep-17
Mar-18
Sep-18
Apr-19
Oct-19
Feb-15
Feb-16
Feb-15
Feb-16
Source: Bloomberg, Mandiri Sekuritas estimates Source: Bloomberg, Mandiri Sekuritas estimates
FIGURE 36. JSMR OPERATING AND CONCESSION TOLL ROADS FIGURE 37. JSMR TOLL ROAD CONCESSION AND CAPEX
(km)
1,800 (Rp bn) (Rp bn)
150,000 25,000
1,600 19,787
20,403
1,400 120,000 20,000
1,200
14,700
1,000 90,000
11,158
15,000
1,527
1,527
1,527
1,527
1,497
800
125,060
9,212
115,700
8,331
1,260
60,000 9,360 10,000

101,000
1,075
600
1,011
89,842
987
974
70,055
62,044
763
400
697
30,000 3,864 5,000

608
590
40,257
29,717
200
‐ ‐ ‐
2015 2016 2017 2018 2019F 2020F 2021F 2022F
2015 2016 2017 2018 2019F 2020F 2021F
Toll road concession (gross ‐ LHS) Capital expenditures (RHS)
Operated Concession

FOCUS | Jasa Marga
FIGURE 38. JSMR’S TOLL ROAD REVENUES DISTRIBUTION – FIGURE 39. JSMR’S TOLL ROAD REVENUES DISTRIBUTION –
PARENT AND SUBSIDIARIES GREATER JAKARTA VS NON-GREATER JAKARTA
100% 6% 100%
6% 6%
90% 15% 21% 90%
34% 37% 33% 35% 33% 36% 38% 38%
80% 45% 80% 39% 40%
70% 70%
60% 60%
50% 94% 94% 50%
94%
40% 85% 79% 40%
66% 63% 67% 65% 67% 64% 62% 62%
30% 55% 30% 61% 60%
20% 20%
10% 10%
0% 0%
2015 2016 2017 2018 2019F 2020F 2021F 2022F 2015 2016 2017 2018 2019F 2020F 2021F 2022F
Parent Subsidiary Greate Jkt Non Jkt
FIGURE 40. JSMR’S TOTAL TRAFFIC AND GROWTH FIGURE 41. JSMR’S TOTAL REVENUES AND GROWTH
1,800 15% 20,000 35%
11.5% 17,973
1,569
1,600 18,000 29.2%
1,473 30%
1,421 1,397 1,407 10%
1,367 6.5% 16,000
1,400
4.7% 14,867
4.9% 1,263 1,262
14,000 13,533 25%
1,200 2.2% 5%
20.9%
12,000
Traffic in mn
revenues in bn
0.0%
Growth (%)
1,000 10,471 20%
Growth (%)
0% 16.1% 9,970
10,000 8,879 9,080
800 ‐3.8%
7,646 15%
8,000 9.9%
600 ‐5%
9.8%
‐9.6% 6,000 10%
400
‐10% 4,000 5.4% 5.0%
200 2.3% 5%
2,000
‐ ‐15%
2015 2016 2017 2018 2019F 2020F 2021F 2022F 0 0%
2015 2016 2017 2018 2019F 2020F 2021F 2022F
Total traffic Growth
Total revenues Growth
FIGURE 42. JSMR’S TRAFFIC PER TOLL ROADS – MANSEK’S FORECAST

Number of traffic (mn vehicle)
Section Location
2013 2014 2015 2016 2017 2018 2019F 2020F 2021F 2022F
Jagorawi Jabodetabek - West Java 199 201 203 207 189 148 148 151 154 158
Jakarta-Cikampek Jakarta - West Java 202 205 215 221 205 182 169 166 162 159
Jakarta-Tangerang Jabodetabek 113 120 127 131 133 138 135 139 143 148
Cawang-Tomang-Cengkareng Jabodetabek 282 282 284 294 301 296 287 293 299 305
Purbaleunyi West Java 64 66 66 67 69 70 70 72 73 75
Surabaya-Gempol East Java 81 83 89 97 101 100 103 106 110 113
Semarang Central Java 49 48 50 52 53 40 38 39 39 40
Belmera North Sumatra 24 25 25 26 28 28 27 27 28 28
Palimanan-Kanci Central Java 20 20 23 19 15 14 16 17 19 20
Jakarta Outer Ring Road Jabodetabek 223 250 273 178 224 154 158 163 168 172
Subsidiaries
Bogor Ring Road West Java 12 14 15 16 16 16 17 18 19 20
Surabaya-Mojokerto East Java 11 12 13 15 17 25 31 36 41 46
Semarang-Solo Central Java 7 15 19 20 20 - - - - -
Nusa Dua-Ngurah Rai-Benoa Bali 3 14 16 17 18 18 16 17 18 19

FOCUS | Jasa Marga
Number of traffic (mn vehicle)

Section Location
2013 2014 2015 2016 2017 2018 2019F 2020F 2021F 2022F
Gempol-Pandaan East Java - - 3 6 7 11 16 21 25 28
Gempol-Pasuruan East Java - - - - 1 4 12 14 16 18
Cengkareng-Kunciran Jabodetabek - - - - - 0 2 28 33 36
Kunciran-Serpong Jabodetabek - - - - - 0 2 31 40 48
Medan-Kualanamu-
North Sumatra - - - - 1 5 8 10 12 14
Tebingtinggi
Solo-Ngawi Central Java - - - - - 3 10 12 13 14
Ngawi-Kertosono Central Java - - - - - 1 7 7 8 9
Cinere-Serpong Jabodetabek - - - - - - 1 21 26 29
Batang-Semarang Central Java - - - - - - 11 17 18 20
Manado-Bitung North Sulawesi - - - - - - 0 5 6 7
Balikpapan-Samarinda East Kalimantan - - - - - - 0 4 5 6
Pandaan-Malang East Java - - - - - - 5 12 14 16
Jakarta-Cikampek South Jabodetabek 0 0 2 33
Jakarta-Cikampek Elevated Jabodetabek 0 16 20 24
Probolinggo - Banyuwangi East Java 0 0 0 7
TOTAL TRAFFIC 1,289 1,354 1,421 1,367 1,397 1,254 1,290 1,443 1,512 1,611
Growth 5.1% 5.0% 4.9% -3.8% 2.2% -9.6% 0.0% 11.5% 4.7% 6.5%
FIGURE 43. JSMR AVERAGE REVENUES PER CAR BY TOLL ROADS – MANSEK’S FORECAST
Average revenue per traffic (Rp / vehicle)
Section Location
2013 2014 2015 2016 2017 2018 2019F 2020F 2021F 2022F
Jagorawi Jabodetabek - West Java 2,758 3,029 3,061 3,371 4,613 5,499 4,699 5,066 5,090 5,733
Jakarta-Cikampek Jakarta - West Java 4,844 4,981 5,293 5,579 6,160 6,361 7,282 7,325 7,779 7,825
Jakarta-Tangerang Jabodetabek 3,617 3,906 3,991 4,447 5,677 6,174 6,175 6,577 6,578 7,007
Cawang-Tomang-Cengkareng Jabodetabek 3,933 4,295 4,389 4,799 4,904 5,252 5,339 5,595 5,687 5,960
Purbaleunyi West Java 15,992 17,801 18,154 20,101 18,882 19,810 20,944 21,103 22,311 22,481
Surabaya-Gempol East Java 3,320 3,739 3,777 4,128 4,145 4,479 4,486 4,772 4,779 5,084
Semarang Central Java 2,156 2,224 2,255 2,651 2,640 4,026 4,031 4,289 4,295 4,569
Belmera North Sumatra 3,405 3,612 3,652 4,115 4,079 4,716 4,723 5,024 5,031 5,352
Palimanan-Kanci Central Java 5,349 5,668 5,777 8,938 12,417 13,955 13,974 14,866 14,886 15,837
Jakarta Outer Ring Road Jabodetabek 4,732 4,727 4,263 5,662 4,582 6,762 6,699 7,066 6,995 7,435
Subsidiaries
Bogor Ring Road West Java 3,659 4,939 5,697 6,111 6,250 8,442 9,013 9,041 9,653 9,683
Surabaya-Mojokerto East Java 1,567 1,568 1,547 2,345 2,948 12,448 13,046 13,332 13,972 14,279
Semarang-Solo Central Java 5,572 7,147 6,909 7,533 2,924 - - - - -
Nusa Dua-Ngurah Rai-Benoa Bali 7,295 7,796 7,473 8,267 8,234 8,860 8,873 9,547 9,561 10,288
Gempol-Pandaan East Java - - 11,028 10,288 9,456 8,590 0 0 0 0
Gempol-Pasuruan East Java - - - - 12,063 18,157 18,702 19,342 19,923 20,606
Cengkareng-Kunciran Jabodetabek - - - - - - 11,352 11,352 11,926 12,150
Kunciran-Serpong Jabodetabek - - - - - - 9,512 9,512 9,992 10,180
Medan-Kualanamu-
North Sumatra - - - - 28,752 38,850 39,161 41,387 41,718 44,090
Tebingtinggi
Solo-Ngawi Central Java - - - - - - - - - -
Ngawi-Kertosono Central Java - - - - - - - - - -
Cinere-Serpong Jabodetabek - - - - - - 8,619 8,619 9,130 9,205
Batang-Semarang Central Java - - - - - - - - - -

FOCUS | Jasa Marga
Average revenue per traffic (Rp / vehicle)

Section Location
2013 2014 2015 2016 2017 2018 2019F 2020F 2021F 2022F
Manado-Bitung North Sulawesi - - - - - - - 32,319 32,319 33,146
Balikpapan-Samarinda East Kalimantan - - - - - - - 79,216 79,216 83,913
Pandaan-Malang East Java - - - - - - 25,380 25,380 26,029 27,106
Jakarta-Cikampek South Jabodetabek - - - - 40,960 40,960
Jakarta-Cikampek Elevated Jabodetabek - - - 55,260 55,260 58,562
Probolinggo - Banyuwangi East Java - - - -
AVERAGE REVENUE/TRAFFIC 4,500 4,865 4,880 5,552 5,730 6,961 7,138 8,503 8,964 10,290
Growth -1.1% 8.1% 0.3% 13.8% 3.2% 21.5% 2.5% 19.1% 5.4% 14.8%
Baking in JSMR’s cost efficiency strategy. Jasa Marga has fully implemented e-toll
payment gates since late-2017, reducing the ratio of toll collectors to electronic devices.
Before the implementation of e-payment system, Jasa Marga needed approx. five people
per shift to cover its average three toll per gate, while after applying e-toll payment it
only takes 1 person to cover the whole toll gate.
In other words, the company made 65% efficiency in toll collector expense from the
implementation of e-toll payment. JSMR still needs a person to cover a payment gate in
order to assist with accidental payment system error. Therefore, aligned with e-toll
implementation in all the gates, the company has introduced a professional transfer
program for its permanent employees named A-Life program.
The company’s A-Life program has started to bear fruit in 2Q19 with lowering employee
allowances by 13% yoy since the first implementation. Jasa Marga provides five types of
A-life programs, which are as follows:
 A-life program type 1–3: The company shifts its employees from the parent co. to
one of its entities, either a toll road-related subsidiary or non-toll road related
company under Jasa Marga.
 A-life program type 4: The company provides an entrepreneurship training for its
employees to open up a business in JSMR’s rest area. However, the employee
will not be legally considered as JSMR’s permanent employee.
 A-life program type 5: The company axes its permanent employees with one-off
severance payments.
FIGURE 44. JSMR’S COST EFFICIENCY PROGRAM FIGURE 45. PERSONNEL EXPENSE/KM TO INFLATION+GDP
1200 2.8 3.0 20%
2.6
14% 14%
2.6 2.6
10%
2.4 2.4 8% 8% 9% 8% 9%
1000 2.5 10% 14%
2.1
7% 6% 7%
800 2.0 0% 3%
1.5
2012 2013 2014 2015 2016 2017 2018 2019F
600 1.5
(%)
-10%
-9% -8%
974
400 1.0
763
697
-20%
608
590
576
554
544
200 0.5
-30%
0 0.0
2012 2013 2014 2015 2016 2017 2018 2019F -40% -37%
Operating toll road (km) Personnel expense/km Personnel expense/km growth Inflation + GDP growth

FOCUS | Jasa Marga
Up to 6M19, JSMR’s total employees stood at 6,780 people, a 16% decline from FY17
despite the operating toll road has increased by 398 km. Based on our discussion with the
company, the big chunk of A-Life program was for type-5 participants, accounting for
approximately more than 60% of the total partakers.
FIGURE 46. JSMR’S EBITDA AND GROWTH 2014-22F FIGURE 47. JSMR’S OPERATING MARGINS 2014-22F
(IDRbn) (%) 70%
62.0%
60.3% 59.9%
12,000 60% 57.1%
60% 56.1%
50% 53.7% 53.6%
52%
10,000 50% 50%
50% 54.3%
36% 52.0% 51.9%
8,000 40% 47.4%
45.8% 46.1%
25% 40% 44.0%
42%
6,000 30% 39%
21% 30% 24.2%
4,000 15% 20% 21.3% 22.1%
20% 19%
9% 9% 20% 15.9% 16.7%
2,000 7% 10% 13.4%
11.2%
2%
10%
‐ 0%
2014 2015 2016 2017 2018 2019F 2020F 2021F 2022F 0%
2014 2015 2016 2017 2015 2019F 2020F 2021F 2022F
EBITDA EBITDA growth
EBITDA margin EBIT margin Net margin
Subsequently, we estimate JSMR’s EBITDA margin to gradually improve from 57% in 2019
to 60% in 2020/21. Thus, combining JSMR’s solid revenues growth from the operating toll
road and opex efficiency initiative, we expect the company’s EBITDA to accelerate by 22%
CAGR 2018-23F.
Where are we now at the capex cycle? We think the market concerns on JSMR’s
accelerated capex in the past 5 years is overdone, as there are only 2 toll road segments
in the pipeline, which are still under land clearing and tender process: South Jakarta–
Cikampek elevated (64 km) and Probolinggo–Banyuwangi (173 km) with estimated
investments of Rp14.7tn and Rp23.4tn, respectively.
As we expect the company’s capex will reach Rp20tn in 2019, we believe it will be the
peak of JSMR’s capex cycle with 4 toll roads to be completed in 2019. The detailed list of
completed toll roads in 2019 are as follows:
1. Jakarta–Cikampek elevated toll road for Rp3.9tn

2. Balikpapan–Samarinda toll road for Rp7.0tn
3. Serpong–Cinere toll road for Rp2.3tn
4. Serpong–Kunciran toll road for Rp3.5tn
Excluding the toll roads above, there are only 5 toll roads under development with
expected capex of Rp30tn in the next 3 years. The company also mentioned that it would
gradually build Probolinggo–Banyuwangi in stages to see the development in the
surrounding economic activities.
We are a supporter of Probolinggo–Banyuwangi’s gradual development to minimize the

traffic risk on the opening of a greenfield toll road, while at the same time, JSMR will be
able to allocate its capital resources to develop other attractive toll roads.

FOCUS | Jasa Marga
FIGURE 48. JSMR’S TOLL ROADS DEVELOPMENT SCHEDULE AND CAPEX

Mansek's estimate capex
Toll-road Section Length (in km) Current status
(IDRtn)
2019
Jakarta - Cikampek II elevated Jakarta-Cikampek Elevated 39.0 3.9 Under construction
Cinere - Serpong Serpong - Pamulang 6.6 1.5 Under construction
Kunciran - Serpong Kunciran-Serpong 11.2 3.5 Under construction
Balikpapan - Samarinda Balikpapan-Samarinda 99.0 7.0 Under construction
2020
Cinere - Serpong Pamulang - Cinere 3.6 0.8 Under construction
Kunciran - Cengkareng Kunciran - Cengkareng 14.2 5.0 Under construction
Manado - Bitung Manado - Bitung 36.4 5.0 Under construction
2021
Jakarta-Cikampek South Jakarta-Cikampek South 64.0 15.7 Land clearing
2022
Probolinggo – Banyuwangi Probolinggo - Jember 30.0 2.6 Tender process
Total 304.0 45.0
Source: Companny, Mandiri Sekuritas estimates
FIGURE 49. JASA MARGA’S CAPEX AND TOLL ROAD FIGURE 50. JASA MARGA’S CASH FLOW
CONCESSION
(Rp bn) (Rp bn) IDRbn IDRbn
150,000 25,000 30,000 10,000
19,787
20,403 25,000 5,000
120,000 20,000 20,000 -
15,000
14,700 (5,000)
90,000 15,000 10,000
11,158
(10,000)
5,000
125,060
9,212
115,700
60,000
8,331
9,360 10,000 (15,000)
101,000
-
89,842
2015 2016 2017 2018 2019F 2020F 2021F 2022F (20,000)

(5,000)
70,055
62,044
30,000 3,864 5,000 (25,000)

(10,000)
40,257
29,717
(15,000) (30,000)
‐ ‐
(20,000) (35,000)
2015 2016 2017 2018 2019F 2020F 2021F 2022F
Toll road concession (gross ‐ LHS) Capital expenditures (RHS) Operating Investing Financing Free cash flow
Source: Company, Mandiri Sekuritas estimates. Source: Company, Mandiri Sekuritas estimates.
Moreover, Jasa Marga has proven its fund-raising capability to balance the cash inflow
and outflow during extensive capex period in recent years through alternative financing.
To refresh, the company has issued five creative financings to raise Rp11.5tn so far,
consist of the following:
1. Asset securitization based on Jagorawi toll road’s future revenue as the

underlying assets with total issuance of Rp2.0tn. This is the first asset
securitization with future-backed asset revenue issuance in Indonesia.
2. Project bonds with the underlying asset of JORR W2N. The company managed
to raise Rp1.5tn through project bond issuance. This is the first project bond
issuance in Indonesia.
3. Global IDR bonds (Komodo Bonds). The company raised Rp4.0tn by issuing IDR
denominated global bonds, marking it as the first global IDR bonds issued by an
Indonesian company.

FOCUS | Jasa Marga
4. Equity based mutual fund (RDPT). The company raised Rp3.0tn from the RDPT
issuance with underlying assets of Solo–Ngawi, Ngawi–Kertosono, and
Semarang–Batang toll roads. Equipped with call and put options, this is the first
RDPT issuance in Indonesia.
5. Infra investment trust (KIK DINFRA). The company raised Rp1.0tn from the KIK
DINFRA issuance with underlying asset of Gempol–Pandaan toll road.
FIGURE 51. IRR BUYBACK OPTION FOR RDPT

JSMR's Alternative Size Issuance Tenor Annual
Underlying Assets
Financing (IDRtn) date (years) return
Asset securitization - 5-year future revenue based of
2.0 Aug-17 5 8.40%
KIK EBA Jagorawi toll road
Project bond- MLJ
1.5 Nov-17 3 - 12 7.0 - 9.0% JORR W2N
Bond
Global IDR bond -
4.0 Dec-17 3 7.50% JSMR
Komodo Bond
20% stake in Solo - Ngawi, Ngawi -
Equity based mutual
3.0 Jun-18 5 10.25% Kertosono, and Batang - Semarang
fund - RDPT
toll road with buyback option
52% stake in Gempol Pandaan (after
KIK DINFRA 1.0 Apr-19 5 9.00%
dilution of right issue)
FIGURE 52. IRR BUYBACK OPTION FOR RDPT

IRR (a) 10.25%
Initial NAV in IDR/bn (b) 1,000
Buyback Strike price

Buyback annual IDRbn put exercise Gain on buyback
Year annual plans in (e = cum. b*
plans (c) (f = c*a) in IDRbn (g = f-a))
unit (d =a*c) (1+a))
0 1,000
1 12% 121.7 1102.5 134.1 12
2 11% 111.7 1216 135.7 24
3 10% 100.0 1340 134.0 34
4 7% 66.7 1477 98.5 32
5 60% 600.0 1629 977.3 377
Total 1,480 480
FIGURE 53. IRR BUYBACK OPTION FOR KIK DINFRA

IRR (a) 9.00%
Initial NAV in IDR/unit (b) 1,000
Buyback Strike price

Buyback annual IDRbn put exercise Gain on buyback in
Year annual plans in (e = cum. b*
plans (c) (f = c*a) IDRbn (g = f-a))
unit (d =a*c) (1+a))
0 1,000
1 10% 100 1090 109 9
2 10% 100 1188 119 19
3 10% 100 1295 130 30
4 10% 100 1412 141 41
5 60% 600 1539 923 323
Total 1,422 422

FOCUS | Jasa Marga
We highlight that the underlying for the toll road alternative financing is predominantly
derived from mature toll roads, as investors need certainty with predictable traffic
assumptions. Therefore, we believe JSMR has ample room to do another round of
financing, since the company still has a card up its sleeve that has not been monetized as
underlying asset yet.
FIGURE 54. INDONESIA’S POTENTIAL TOLL ROAD DEVELOPMENT PLAN 2019-2024

Toll road Length (Km) Investment (IDRtn)
Serang-Panimbang 74 5.3
Probolinggo-Banyuwangi 172.9 23.4
Ciawi-Sukabumi 54 7.8
Cileunyi-Sumedang-Dawuan (section 1, 4, 5, 6) 39.4 8.4
Krian-Legundi-Bunder-Manyar 38.39 12.2
Semarang-Demak 27 15.3
Kertosono-Kediri 24 3.7
Sukabumi-Ciranjang 28 5.5
Ciranjang-Padalarang 33 3.2
Yogyakarta-Bawen 71 13
Gedebage-Tasikmalaya-Cilacap 184 53.6
Solo-Yogyakarta-Kulon Progo 91.9 22.6
Patimban Port access road 37.7 6.4
Harbour Road Semarang 26.2 11.2
Inner Ring Road (North) Bandung 27 6.3
Inner Ring Road (South) Bandung 53 8
Inner Ring Road (South) Semarang 66.2 9.9
Probolinggo-Lumajang 27.4 4.1
Malang-Kepanjen 24 3.6
Sukorejo-Batu-Kediri 110 21.1
Cirebon-Kuningan 19.3 2.9
Sukabumi-Ratu Port 43.4 6.5
Pandeglang-Rangkasbitung 9.4 1.4
Cilacap-Yogyakarta 167.1 25.1
Tegal-Cilacap 94.3 14.1
Demak-Tuban-Gresik 236 67.95
Access Road New International Airport Yogyakarta 30.6 4.6
Access Road to Wonosobo 81.6 12.2
Lumajang-Jember 53.4 8
Situbondo-Jember 70.5 10.6
Total 2014.7 398
Source: Bisnis Indonesia
FIGURE 55. EPS GROWTH TREND FIGURE 56. LEVERAGE TREND

(Rp) (%) (%) (x)
350 50 250 4.5
300 40 4.0
200 3.5
250 30
3.0
200 20 150
2.5
150 10 2.0
100
1.5
100 0
50 1.0
50 (10) 0.5
0 (20) 0 0.0
Dec-11
Dec-12
Dec-13
Dec-14
Dec-15
Dec-16
Dec-17
Dec-18
Dec-19
Dec-20
Dec-10
Dec-11
Dec-12
Dec-13
Dec-14
Dec-15
Dec-16
Dec-17
Dec-18
Dec-19
Dec-20
EPS EPS Growth [RHS] Net Debt/Equity (NDE) Interest Cover [RHS]

FOCUS | Jasa Marga
FIGURE 57. DCF CALCULATION

2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
EBIT 7,032 7,721 9,755 13,737 15,824 17,292 19,245 20,871 22,735 24,315 26,571
Add:Depreciation 1,127 1,179 1,381 1,483 1,546 1,606 1,663 1,721 1,773 1,826 1,880
Less: Tax (2,461) (2,703) (3,414) (4,808) (5,538) (6,052) (6,736) (7,305) (7,957) (8,510) (9,300)
Less: Capital expenditure (11,580) (15,142) (9,824) (10,520) (8,705) (8,895) (9,089) (9,288) (9,491) (9,700) (9,913)
Add: Change in WC (1,240) 1,346 (406) 8,931 464 482 518 498 517 518 545
Free Cash Flow (7,122) (7,599) (2,508) 8,822 3,590 4,433 5,601 6,498 7,577 8,449 9,783
Discount factor 0.98 0.91 0.84 0.78 0.73 0.67 0.63 0.58 0.54 0.50 0.46
PV of FCFF (6,989) (6,918) (2,119) 6,913 2,610 2,989 3,503 3,771 4,079 4,220 4,533
Firm Value 127,121

Add: Cash 4,756
Less: Debt (69,486)
Less: Minority interest (6,386)
Total Equity Value 56,005
No of outstanding
7,258
shares (mn)
DCF Value 7,716
Target Price
7,716
(Rp/share)
FIGURE 58. SENSITIVITY VALUATION

WACC
in IDR 5.8% 6.8% 7.8% 8.8% 9.8%
2.70% 11,793 8,351 5,460 3,041 1,018
3.20% 13,522 9,724 6,561 3,931 1,744
Inflation
3.70% 15,342 11,168 7,716 4,864 2,504

4.20% 17,258 12,686 8,929 5,841 3,299
4.70% 19,277 14,282 10,203 6,866 4,131
Source: Mandiri Sekuritas Estimates
FIGURE 59. PEERS VALUATION

Net Income PE PBV EV/EBITDA EPS GR DIV YLD
Mkt Cap
Ticker Company (USDmn) (x) (x) (x) (%) (%)
(USDmn) 2019F 2020F 2019F 2020F 2019F 2020F 2019F 2020F 2019F 2020F 2019F 2020F
JSMR IJ Jasa Marga 2,822.5 151.5 159.1 18.6 18.0 2.1 1.9 10.7 8.8 34.5 0.1 1.1 1.1
600548 Shenzen
3,157.2 355.8 327.3 9.1 10.0 1.3 1.2 8.5 8.1 -25.4 148.3 5.2 4.4
CH Expressway
Zhejiang
576 HK 3,743.4 510.2 545.5 7.4 7.0 1.1 1.0 8.2 7.5 16.0 8.7 6.5 6.9
Expressway
Jiangsu
177 HK 7,267.6 574.8 600.5 11.3 10.8 1.7 1.6 10.4 10.0 -6.3 22.0 5.3 5.4
Expressway
Sichuan
107 HK 1,439.3 130.9 137.0 7.1 6.6 0.4 0.4 8.0 7.8 7.9 18.0 5.2 5.2
Expressway
Lingkaran
LTK MK 590.9 56.8 61.5 10.6 9.6 N/A N/A 6.1 6.3 3.2 3.2 5.9 5.4
Trans Kota
Source: Bloomberg

FOCUS | Jasa Marga
Favorable Macro Backdrop – Inorganic Growth

Easing monetary and fiscal policies will create a tailwind for Jasa Marga. The
declining BI rate of 75 bps ytd would result in a lower cost of funding and
increase net profit accordingly, and also lower WACC on the back of declining
bond yield. Moreover, corporate income tax cut would translate to 6-8% upside
for JSMR’s earnings.
Fiscal: lower infra bond and corporate income tax reduction. Recently, the Indonesian
Government has announced two key developments on the macro-side for 2020, which
are corporate income tax reduction and withholding infra-related bond tax reduction. We
believe Jasa Marga is poised to benefit from the aforementioned policies, as these would
bring inorganic growth opportunities for both earnings and valuation, which can be
elaborated as follows:
1. Corporate income tax reduction. The Government plans to reduce corporate

income tax in stages for the next five years. The first implementation will be
materialized in 2021, which will cut corporate income tax from 25% to 23%.
Accordingly, the corporate income tax will further be reduced to 20% in 2022.
Our sensitivity scenario shows that every 1% drop in tax rate would translate to
134 bps increase in JSMR’s bottom-line; thus, we see a potential inorganic
earnings growth of 4-7% on the gradual tax reduction implementation in 2021-
22.
Furthermore, we believe this corporate tax reduction would marginally help Jasa
Marga to finance its capex, particularly to fund its two under-development toll
roads of South Jakarta Cikampek II (173 km) and Probolinggo–Banyuwangi (64
km) with a total capex of Rp39.6tn.
2. Infra-related bond tax rate reduction from the current 15% to only 5%. Jasa Marga is
the first to provide alternative financing in Indonesia by issuing global bonds in
rupiah denomination; equity based mutual fund (RDPT) for its Solo–Ngawi,
Ngawi–Kertosono, and Semarang–Batang toll road segments; and KIK DINFRA
for its Gempol Pandaan toll road.
The upcoming regulation to cut the withholding infra-related bond tax rate
would certainly benefit JSMR, as the company is a heavy-asset player. This would
allow JSMR to create another mezzanine financing-scheme backed with its toll
road assets. Note that the bond tax rate reduction would only apply to RDPT-
issuance products.
If the bill is passed, we believe JSMR would be able to lower its cost of funding,
as the company could offer a lower coupon rate to provide an equivalent return
to investors. To remind, JSMR had issued Rp3.0tn worth of RDPT.
It is important to highlight that the proposed plan has to be approved by the Indonesian
Parliament first. However, we believe the Government will support the plan, since
financing is one of the key factors to drive the Government’s infrastructure development
agenda.
Monetary: Declining BI Rate Would Translate to Higher Valuation
Having a highly leveraged balance sheet, we think Jasa Marga is poised to benefit from
the recent dovish trend by the Fed, as the Indonesian Central Bank has cut 75 bps on the
BI rate accordingly. We think this favorable macro condition is analogous to an egg in
Jasa Marga’s beer, as the company could lower its cost of funding while at the same time
increase its valuation due to lower bond yield.

FOCUS | Jasa Marga
The current macro condition is completely different compared to last year when BI rate
rose 175% throughout 2018. Accordingly, Jasa Marga has put its best effort to maintain
its WACD at 9.46%. Following the recent BI rate dovish trend, the concern of banks’ time
lag to adjust the lending rate is overdone, and we think it is possible for JSMR’s to lower
its weighted cost of debt due to favorable environment.
FIGURE 60. BI RATE CUT AND BOND YIELD CORRELATION FIGURE 61. BOND YIELD AND BI INTEREST RATE CUT
(%) (%) 7.00 10.0
7.00 14.0 6.50 9.0
6.50 6.00
13.0 8.0
6.00
12.0 5.50
5.50 7.0
5.00
5.00 11.0 6.0
4.50
4.50
10.0
4.00 5.0
4.00
3.50
9.0 3.50 4.0
3.00 8.0 3.00 3.0
Apr‐14
Apr‐19
Dec‐15
May‐16
Jan‐13
Jun‐13
Nov‐13
Sep‐14
Feb‐15
Jul‐15
Oct‐16
Mar‐17
Aug‐17
Jan‐18
Jun‐18
Nov‐18
Sep‐19
Jan-13
Apr-13
Jul-13
Oct-13
Jan-14
Apr-14
Jul-14
Oct-14
Jan-15
Apr-15
Jul-15
Oct-15
Jan-16
Apr-16
Jul-16
Oct-16
Jan-17
Apr-17
Jul-17
Oct-17
Jan-18
Apr-18
Jul-18
Oct-18
Jan-19
Apr-19
Jul-19
7-DRRR (%) (LHS) Lending rate (RHS) 7‐DRRR (%) (LHS) Average 10 year GB (RHS)
Source: CEIC Source: CEIC
Our economist team sees a potential BI rate cut if the soon-to-be announced 3Q19 results
are weaker-than-expected, while our fixed income team targets the 10-yr Indonesia
government bond yield to reach 6.75% by year end 2019 and 6.25% by 2020. Thus, on the
back of envelope, our sensitivity assessment shows that a 100 bps decline in JSMR’s cost
of funding will translate to a potential +19% earnings revision, while a 1% decline in bond
yield will translate to +11% JSMR’s valuation.
FIGURE 62. EASING MONETARY TRANSMISSION TO LENDING RATE AND DEPOSIT RATE
400
329
300
213
200 175 175
155
97 91 93
100 55
24 25
‐
‐
(13) (9) (8)(15) (2)
(32) (25) (25) (50) (62)
(50)(43) (57) (48)
(100) (67) (77) (75) (75)
(91)(91) (105) (101)
(114) (122)
(145) (150) (142)
(200)
(244)
(300)
2010 2011 2012 2013 2014 2015 2016 2017 2018 9M19
Policy rate changes (bps) Avg. loan rates (bps) Avg. deposit rates (bps) Avg. 10yr GB
Source: CEIC

FOCUS | Jasa Marga
JSMR’s share price mirroring Indo bond yield? We assess the correlation between the
Indonesian government 10-year bond yield (GIDN10Y) changes to Jasa Marga’s share
price movement, as many believe GIDN10Y and JSMR’s stock price have a profoundly
significant reversed-interrelationship. We use various time horizons from 3 years (2017–
ytd 2019) up to 10 years (2010–ytd 2019) by using daily price movements to examine the
significance correlation.
Our findings show that there is no strong correlation between Jasa Marga’s daily share
price changes and bond yield price changes throughout the examination periods. Thus,
we believe the market’s perception is more toward the valuation perspective, as a minor
revision in bond yield will have a significant impact to JSMR’s valuation.
FIGURE 63. BOND YIELD – JSMR’S SHARE PRICE FIGURE 64. WEAK CORRELATION BETWEEN BOND YIELD AND
JSMR’S SHARE PRICE
(%) IDR Starting Year (up to Oct'19) Correlation
12 8,000
7,000 2010 -23%
10
6,000 2011 -24%
8
5,000
6 4,000 2012 -23%
3,000 2013 -24%
4
2,000
2 2014 -23%
1,000
0 0 2015 -22%
2016 -21%
2017 -24%
GIDN10YR Index (LHS) JSMR IJ - Share price (RHS) 2018 -27%

FOCUS | Jasa Marga
Company Profile
Jasa Marga is the largest toll road operator in Indonesia with 66% market share
and 974 km of operating toll roads. As an SOE company, JSMR has been the
spotlight of Indonesia’s massive infra toll road development, developing 398 km
of new toll roads over the past 5 years. The earliest toll road concession ends in
2044; thus, the company still has a long-term cashflow influx.
Indonesia’s first toll road operator. The Government first established Jasa Marga in
March 1, 1978, according to Government Regulation No. 4/1978. There was a need for a
reliable road network in the country to support economic growth, hence the
establishment of the company. Its main task was to plan, build, operate, and maintain toll
roads as well as its accompanying facilities so that toll roads can offer more benefits than
non-toll roads. The first toll road that was established was the Jakarta–Bogor–Ciawi
(Jagorawi) toll road. The Government then established the build, operate, and transfer
(BOT) system in 1980, which prompted it to invite the participation of private parties in
the construction of toll roads.
Changes in regulation. Later in 2004, the Government established new Laws that
specifically regulated toll roads: Law No. 38/2004 and Government Regulation
No.15/2005. These replaced Law No. 13/1980. With the issuance of those Laws, Jasa
Marga’s role changed in the toll road industry. Previously, its role encompassed
regulating toll roads in addition to developing and operating them. But since then, the
Toll Road Regulatory Agency was created to regulate the toll road industry, returning the
authority to the Government. The responsibility of determining toll tariff (to be adjusted
based on inflation rate every two years) was also given to the Minister of Public Works.
Jasa Marga became purely a toll road operator and developer.
FIGURE 65. COMPANY STRUCTURE

Indonesian Government
Ministry of State Owned Enterprises
70%
Public Jasa Marga

30%
Toll Road Subsidiaries Other Subsidiaries
PT Jasamarga PT Jasamarga PT Jalantol

PT PT Jasamarga PT Jasamarga PT Jasamarga
PT Marga PT Jasamarga PT Jasamarga PT Jasamarga PT Jasamarga Ngawi Tollroad Lingkarluar
Cinere Manado Gempol Probolinggo
Sarana Jabar Bali Tol Pandaan Tol Kualanamu Tol Japek Selatan Kertosono Operator Jakarta
Serpong Jaya Bitung Pasuruan Banyuwangi
55% 55% 92.2% 55% 80% Kediri 99.9% 99%
55% 65% 98.8% 94.6%
40% PT Jasamarga Toll
PT Jasamarga
PT PT PT Jasamarga PT Jasamarga PT Jasamarga PT Jasamarga PT Jasamarga PT Jasamarga Road
PT Transmarga PT Jasamarga Properti
Marga Lingkar Marga Trans Semarang Pandaan Surabaya Kunciran Balikpapan Jalanlayang Maintenance
Jateng Solo Ngawi 99.9%
Jakarta Nusantara Batang Malang Mojokerto Cengkarang Samarinda Cikampek 99.7%
58.91% 40%
65% 60% 40% 60% 55% 76.2% 59% 80% PT Jasamarga Transjawa Tol 100%

FOCUS | Jasa Marga
FIGURE 66. JASA MARGA’S REVENUES BREAKDOWN FIGURE 67. TOLL ROADS LENGTH BREAKDOWN
Sulawesi, 3%
Non-toll, 8% Kalimantan, 8%
Construction,
2% Greater Jakarta, 25%
Sumatra, 8%
Bali, 1%
Toll, 91% West Java, 12%

Central Java, 29%
East Java, 14%
FIGURE 68. JASA MARGA’S TRAFFIC BREAKDOWN FIGURE 69. JASA MARGA’S COST BREAKDOWN
Others
Personnel
17%
27%
Repair
maintenance
7%
Taxes
10%
Maintenance, fuel Depreciation

& property Provision for Fuel electricity 21%
3% overlay water
12% 3%
JO expenses
0%
Toll road business mechanism. After the establishment of Law No. 38/2004, the toll
road business mechanism changed so that it would be investment based, meaning that
the company would be investing in toll road projects with reasonable rates of return
based on the concession periods. The company now also has to establish a separate
business entity in order to obtain a new toll road concession right. Currently, Jasa Marga
is managing 13 old toll roads at the parent level, with 20 subsidiaries managing 20 toll
road concessions that were gained after the establishment of the new Law. The company
also owns 5 other subsidiaries that provide support services for toll road operation.
Obtaining concession rights. There are three ways the company could obtain toll road
concession rights. First, the company could participate in a toll road tender held by the
Government; these are called solicited projects. Second, it could acquire a concession
right by increasing its share in an existing toll road section. Third, it could propose
unsolicited projects—the ones not originally included in the Government’s plans.

FOCUS | Jasa Marga
FIGURE 70. CONCESSION RIGHTS
Indonesian Government
Ministry of State Ministry of Public Works

Owned Enterprises and Public Housing
Toll Road Directorate of

70% stake Toll Roads
Regulatory Agency
Concession Concession
Agreement Agreement
Jasa Marga
Private Toll Road
Investors
Source: Company
Three main products and services. Jasa Marga’s services can be classified into three: toll
road business development, toll road operation, and others business development.
1) Toll road business development consists of gaining concession rights for toll
roads through subsidiaries. The process for gaining concession right is as
previously mentioned (tender, acquisition, initiator). The company would then
plan for the construction of the toll road and operate it.
2) Toll road operation encompasses services, such as for transaction, traffic, and
maintenance. Jasa Marga’s other business subsidiaries are in charge of providing
these services. Transaction services refer to the usability (speed) of the available
tools at each gate to process each user’s transaction. Traffic services ensure
safety and smoothness for toll road users. Maintenance refers to ensuring the
quality of the toll roads for the convenience of users.
3) Jasa Marga’s other business development is mainly involved in developing the

land in the toll road (Rumijatol) to provide services like the rest and service areas
(TIP). The company would also engage in property development of the
surrounding areas, providing facilities such as industrial estates, housing, and
offices.

FOCUS | Jasa Marga
FIGURE 71. JSMR’S BOC AND BOD

Board of Commissioners
Sapto Amal Damandari He obtained his Bachelor's degree in Economics, Accounting from Universitas Gadjah Mada. He is currently working
at Republic of Indonesia BPK as the Deputy Chairperson of Board Members II. Prior to that, he worked at PT Pelindo I
President Commissioner/ Independent as President Commissioner and as Commissioner, and held various positions at BPK RI for over 10 years.
Commissioner
Anita Firmanti Eko Susetyowati She obtained her Bachelor's degree in Forestry from Institut Pertanian Bogor, Master's degree in Development
Studies from Institut Teknologi bandung, and Doctoral Degree in Agricultural Sciences from Kyoto University. She is
Commissioner currently working as a member of the Audit Committee of Jasa Marga and as the Secretary General of the Ministry of
Public Works and Housing of the Indonesian People. Prior to that, she worked as the Head of Human Resources
Development and as Head of Housing Research and Development Center.
Agus Suharyono He obtained his Bachelor's degree in Animal Husbandry from Universitas Brawijaya and Master of Agricultural
Economic from University of Maine. He is currently working as the Assistant Deputy of Agro and Pharmaceutical
Commissioner Industry II at the Ministry of SOE. Prior to that, he worked at PT Hotel Indonesia Natour as the Finance Director and at
PT Pelabuhan Indonesia II as a Commissioner.
Sugihardjo He obtained his Bachelor's degree in Civil Engineering from Universitas Indonesia and Postgraduate in Public Policy
Administration from Universitas Indonesia. He is currently working as Head of the Transportation Research and
Commissioner Development Agency at the Ministry of Transportation. Previously, he worked as Director of Traffic and
Transportation of the Ministry of Transportation, Logistics, and Multimode Expert Staff at the Ministry of
Transportation and Secretary General of the Ministry of Transportation.
Muhammad Sapta Murti He obtained his Bachelor's degree in Law in the Department of Civil/Agrarian Affairs from Universitas Trisakti, Master
of Art in Macroeconomics from Reading University, Master's degree in Notary from Universitas Indonesia, and
Commissioner Doctoral degree from University Padjajaran. He currently serves as an expert in multiple agencies such as Ministry of
Agrarian and Spatial Planning, Ministry of Energy and Mineral Resources, and Ministry of Public Works and Public
Housing, and as a lecturer at Universitas Trisakti and Universitas Indonesia.
Vincentius Sonny Loho He obtained his Accountant degree from Sekolah Tinggi Akuntansi Negara (STAN) and Master of Public
Management from Carnegie Mellon University. Currently, he is working as a member of the Audit Committee of Jasa
Independent Commissioner Marga, Consultative Member of Government Accounting Standards Committee, and Committee member of
Tabungan Perumahan Rakyat. Prior to that, he worked at the Ministry of Finance for around 6 years.
Board of Directors
Desi Arryani She obtained her Bachelor's degree in Civil Engineering from Universitas Indonesia and her Master in Management
from Prasetiya Mulya. She is currently working as the President Director at Jasa Marga. Prior to that, she worked at PT
President Director Waskita Karya as the Director of Operation I from 2013-2016 and as the Director of Operation II in 2011-2012.
Adrian Priohutomo He obtained his Bachelor's degree in Planology Engineering from Institut Teknologi Bandung. He is currently
working as the Director of Development at Jasa Marga. Prior to that, he worked at PT Permata Graha Nusantara as
Director of Development the President Director and at PT Colliers International Indonesia as the Director of Management of Real Estate.
Donny Arsal He obtained his Bachelor's degree in Economics from Universitas Indonesia. He is currently working as the Director
of Finance at Jasa Marga. Prior to that, he worked at various business units at PT Mandiri Sekuritas for over 10 years.
Director of Finance
Mohammad Sofyan He obtained his Bachelor's degree in Civil Engineering from Institut Teknologi Sepuluh November, Postgraduate in
Project Management from Universitas Indonesia, and Postgraduate in Business and IT from the University of
Director of Operations I Melbourne. He is currently working as the Director of Operations I at Jasa Marga. Prior to that, he worked at various
business units at Jasa Marga with 10 years of experience.
Subakti Syukur He obtained his Bachelor's degree in Civil Engineering from Institut Teknologi Bandung and his Master in
Management from Universitas Krisnadwipayana Jakarta. He is currently working as the Director of Operations II as
Director of Operations II Jasa Marga while also serving as the President Commissioner at PT Jasamarga Bali Tol (JBT) and Commissioner of PT
Jasamarga Surabaya Mojokerto (JSM). Prior to that, he worked at PT Marga Lingkar Jakarta as President Director and
General Manager of Cawang-Tomang-Cengkareng.
Alex Denni He obtained his Bachelor's degree in Agro-industrial Management from Institut Pertanian Bogor, Master in
Management from Universitas Atmajaya, and Doctoral Degree in Human Capital from Institut Pertanian Bogor. He is
Director of Human Capital and currently working as the Director of Human Capital and General Affairs at Jasa Marga. Prior to that, he worked at PT
General Affairs Bank Negara Indonesia as the Chief Human Capital Officer and at Dharma Satya Nusantara Group as the Chief
Transformation Officer.
Source: Company

FOCUS | Jasa Marga
FIGURE 72. JASA MARGA TIMELINE

- Fully implemented the
electronic payment system
- Jasa Marga was at every toll road
established with the - Integrated Jakarta-
goal to plan, build, - The authority as the Tangerang Toll Road and
operate and toll road regulator is changed the system in
maintain toll roads- returned to the Toll Jagorawi Toll Road
Jagorawi was the Road Regulatory - Won the concession rights
first toll road to Agency under the for Jakarta-Cikampek II
operate in Minister of Public Works Selatan and Probolinggo –
Indonesia and Public Housing Banyuwangi Toll Roads
1978 1987 2004 2007 2017 2018
- The government started - Jasa Marga Have operated

to invite private parties to becomes a public 787,5 km toll roads
participate in the toll road company through as of August 2018
business through the BOT their IPO and
(Build, Operate, and recorded their
Transfer) system with Jasa shares on the
Marga Indonesia Stock
- Jasa Marga starts Jakarta Exchange
Toll Road Operations
through partial operations
Source: Company
FIGURE 73. JSMR’S PERCENTAGE REVENUES PER TOLL ROADS

Revenues (%)
Section Location
2013 2014 2015 2016 2017 2018 2019F 2020F 2021F 2022F
Jagorawi Jabodetabek - West Java 548 607 620 697 874 816 698 767 786 903
Jakarta-Cikampek Jakarta - West Java 977 1,023 1,138 1,233 1,266 1,155 1,230 1,212 1,262 1,244
Jakarta-Tangerang Jabodetabek 408 467 508 581 756 852 835 916 944 1,036
Cawang-Tomang-Cengkareng Jabodetabek 1,110 1,212 1,247 1,413 1,475 1,554 1,532 1,638 1,698 1,815
Purbaleunyi West Java 1,017 1,176 1,198 1,351 1,299 1,380 1,474 1,515 1,633 1,679
Surabaya-Gempol East Java 270 309 336 402 419 449 463 508 524 574
Semarang Central Java 105 106 113 137 139 160 152 165 169 183
Belmera North Sumatra 82 91 90 105 114 132 125 136 139 151
Palimanan-Kanci Central Java 107 112 133 169 181 200 220 258 284 317
Jakarta Outer Ring Road Jabodetabek 1,053 1,182 1,164 1,010 1,025 1,039 1,060 1,152 1,175 1,276
Subsidiaries
Bogor Ring Road West Java 46 67 87 100 99 139 155 164 183 193
Surabaya-Mojokerto East Java 18 19 20 36 51 312 409 481 574 663
Semarang-Solo Central Java 36 107 129 153 58 0 0 0 0 0
Nusa Dua-Ngurah Rai-Benoa Bali 24 106 123 143 150 161 145 164 173 195
Gempol-Pandaan East Java - - 28 60 68 92 0 0 0 0
Gempol-Pasuruan East Java - - - - 9 71 218 271 321 372
Cengkareng-Kunciran Jabodetabek - - - - - - 21 323 390 438
Kunciran-Serpong Jabodetabek - - - - - - 17 292 398 487
Medan-Kualanamu-
North Sumatra - - - - 24 214 301 414 501 635
Tebingtinggi
Solo-Ngawi Central Java - - - - - - - - - -
Ngawi-Kertosono Central Java - - - - - - - - - -
Cinere-Serpong Jabodetabek - - - - - - 12 184 234 271
Batang-Semarang Central Java - - - - - - - - - -
Manado-Bitung North Sulawesi - - - - - - - 153 199 245

FOCUS | Jasa Marga
Revenues (%)
Section Location
2013 2014 2015 2016 2017 2018 2019F 2020F 2021F 2022F
Balikpapan-Samarinda East Kalimantan - - - - - - - 347 416 507
Pandaan-Malang East Java - - - - - - 135 301 371 444
Jakarta-Cikampek South Jabodetabek - - - - - - - - 93 1,346
Jakarta-Cikampek Elevated Jabodetabek - - - - - - - 908 1,089 1,385
Probolinggo - Banyuwangi East Java - - - - - - - - - 222
TOTAL REVENUES 5,801 6,587 6,933 7,589 8,005 8,726 9,204 12,268 13,557 16,580
Growth 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%

FOCUS | Jasa Marga
Jasa Marga
Profit & Loss Balance Sheet
YE Dec (Rp Bn) 2017A 2018A 2019F 2020F 2021F YE Dec (Rp Bn) 2017A 2018A 2019F 2020F 2021F
Revenue 9,080 9,970 10,471 13,533 14,867 Cash & ST Investment 7,030 6,087 4,412 4,930 4,676
Gross Profit 9,080 9,970 10,471 13,533 14,867 Acct. Receivable 0 0 0 0 0
Oper. Profit 4,155 4,592 4,968 7,032 7,721 Inventory 134 41 45 50 55
EBITDA 4,863 5,590 5,979 8,159 8,901 Others 11,822 5,686 5,938 6,234 6,561
Net Interest (985) (1,523) (2,810) (5,090) (5,425) Current Assets 18,987 11,814 10,395 11,214 11,292
Interest Expense (1,269) (1,840) (3,065) (5,315) (5,656) Investments 1,134 3,227 1,675 2,258 2,374
Interest Income 284 317 255 225 231 Fixed Assets 57,125 64,208 82,181 92,634 106,597
Forex Losses/Gains 0 0 0 0 0 Others 1,947 3,170 2,962 3,071 3,047
Net Other 80 141 (96) (354) (182) Total Assets 79,193 82,419 97,213 109,178 123,311
Pre-Tax Profit 3,250 3,210 2,062 1,588 2,114 Curr. Liabilities 24,998 31,081 22,587 23,554 26,860
Income Tax (1,157) (1,174) (722) (556) (740) Acct. Payable 351 322 338 437 480
Others 0 0 0 0 0 ST Borrowings 3,336 6,415 12,608 14,408 16,608
Minority Interests 107 166 325 485 618 Others 21,311 24,344 9,641 8,710 9,773
Net Profit 2,200 2,203 1,666 1,517 1,992
Long-Term Liabilities
Cash Flow
Long-Term Payable 29,113 26,524 48,078 55,078 63,878
YE Dec (Rp Bn) 2017A 2018A 2019F 2020F 2021F
Others 6,723 4,614 5,203 4,974 5,386
Operating Profit 4,155 4,592 4,968 7,032 7,721 Total Liabilities 60,833 62,220 75,868 83,606 96,124
Net Interest (985) (1,523) (2,810) (5,090) (5,425)
Shareholder’s Equity 18,359 20,199 21,345 25,573 27,186
Depr & Amort 708 998 1,011 1,127 1,179
Other expenses/income 80 141 (96) (96) (354)
Key Ratios
Other Gain / Loss 0 0 0 0 0
YE Dec 2017A 2018A 2019F 2020F 2021F
Tax (1,157) (1,174) (722) (556) (740)
Growth (% YoY)
Chg in Working Capital 9,949 9,485 (14,618) (745) 956
Sales 2.3 9.8 5.0 29.2 9.9
Other Oper. Cash Flow 107 166 325 485 618
Oper. Cash Flow 12,857 12,685 (11,942) 1,899 4,128 EBIT 6.3 10.5 8.2 41.5 9.8
Capital Expenditure (20,403) (8,331) (19,298) (11,957) (15,311) EBITDA 2.1 15.0 7.0 36.5 9.1
FCF (OPCF after Capex) (7,546) 4,354 (31,239) (10,058) (11,183) Net Profit 16.4 0.1 (24.4) (8.9) 31.4
Other Investing CF 3,203 (5,415) 2,338 (938) 306

CF From Investing (17,200) (13,746) (16,960) (12,894) (15,005) Profitability (%)
Net Chg in Debts 7,430 490 27,746 8,800 11,000 Oper. Margin 45.8 46.1 47.4 52.0 51.9
Equity Funds Raised 0 0 0 0 0 EBITDA Margin 53.6 56.1 57.1 60.3 59.9
Dividend (440) (441) (333) (303) (398) Net Margin 24.2 22.1 15.9 11.2 13.4
Other Financing CF 251 68 (186) 3,017 21 ROAA 3.3 2.7 1.9 1.5 1.7
CF From Financing 7,240 118 27,227 11,514 10,623 ROAE 15.3 13.8 9.5 8.1 10.0
Non-Recur. Inc (Exp) 0 0 0 0 0

Extraord. Inc(Exp) 0 0 0 0 0 Leverage
Net Change in Cash 2,898 (944) (1,674) 518 (254) Net Debt / Equity (%) 138.5 132.9 263.6 252.4 278.9
Cash at beginning 4,133 7,030 6,087 4,412 4,930 EBITDA/Gross Int. (x) 3.8 3.0 2.0 1.5 1.6
Cash at End 7,030 6,087 4,412 4,930 4,676
Per Share Data (Rp)
Valuation EPS 303 303 229 209 275
YE Dec 2017A 2018A 2019F 2020F 2021F CFPS 1,771 1,748 (1,645) 262 569
PER (x) 18.6 18.6 24.5 26.9 20.5 BVPS 2,080 2,330 2,490 2,644 2,866
EV/EBITDA (x) 14.3 12.7 16.8 13.7 13.8 DPS 78.1 60.6 60.7 45.9 41.8
P/BV (x) 2.7 2.4 2.3 2.1 2.0
P/CF (x) 3.2 3.2 (3.4) 21.5 9.9
Dividend Yield (%) 1.4 1.1 1.1 0.8 0.7

Mandiri Sekuritas A subsidiary of PT Bank Mandiri (Persero) Tbk
Menara Mandiri Tower I, 25th floor, Jl. Jend. Sudirman Kav. 54 – 55, Jakarta 12190, Indonesia
General: +62 21 526 3445, Fax : +62 21 527 5374 (Equity Sales)
RESEARCH
Adrian Joezer Head of Equity Research, Strategy, Consumer adrian.joezer@mandirisek.co.id +6221 5296 9415
Tjandra Lienandjaja Deputy Head of Equity Research, Banking tjandra.lienandjaja@mandirisek.co.id +6221 5296 9617
Ariyanto Kurniawan Automotive, Coal, Metal Mining, Chemical ariyanto.kurniawan@mandirisek.co.id +6221 5296 9682
Kresna Hutabarat Telecom, Media kresna.hutabarat@mandirisek.co.id +6221 5296 9542
Priscilla Thany Banking, Building Material priscilla.thany@mandirisek.co.id +6221 5296 9569
Lakshmi Rowter Healthcare, Consumer, Retail lakshmi.rowter@mandirisek.co.id +6221 5296 9549
Robin Sutanto Property robin.sutanto@mandirisek.co.id +6221 5296 9572
Edbert Surya Construction, Transportation edbert.surya@mandirisek.co.id +6221 5296 9623
Silvony Gathrie Banking, Research Assistant silvony.gathrie@mandirisek.co.id +6221 5296 9544
Riyanto Hartanto Poultry, Research Assistant riyanto@mandirisek.co.id +6221 5296 9488
Henry Tedja Research Assistant henry.tedja@mandirisek.co.id +6221 5296 9434
Wesley Louis Alianto Research Assistant wesley.alianto@mandirisek.co.id +6221 5296 9510
Leo Putera Rinaldy Chief Economist leo.rinaldy@mandirisek.co.id +6221 5296 9406
Imanuel Reinaldo Economist imanuel.reinaldo@mandirisek.co.id +6221 5296 9651
INSTITUTIONAL SALES
Silva Halim Head Institutional Equities silva.halim@mandirisek.co.id +6221 527 5375
Andrew Handaya Institutional Sales andrew.handaya@mandirisek.co.id +6221 527 5375
Feliciana Ramonda Institutional Sales feliciana.ramonda@mandirisek.co.id +6221 527 5375
Henry Pranoto Institutional Sales henry.pranoto@mandirisek.co.id +6221 527 5375
Kevin Giarto Institutional Sales kevin.giarto@mandirisek.co.id +6221 527 5375
Sharon Anastasia Tjahjadi Institutional Sales sharon.tjahjadi@mandirisek.co.id +6221 527 5375
Talitha Medha Anindya Institutional Sales talitha.anindya@mandirisek.co.id +6221 527 5375
Kusnadi Widjaja Equity Dealing kusnadi.widjaja@mandirisek.co.id +6221 527 5375
Edwin Pradana Setiadi Equity Dealing edwin.setiadi@mandirisek.co.id +6221 527 5375
Jane Theodoven Sukardi Equity Dealing jane.sukardi@mandirisek.co.id +6221 527 5375
Michael Taarea Equity Dealing michael.taarea@mandirisek.co.id +6221 527 5375
RETAIL SALES
Andreas M. Gunawidjaja Head Retail Equities andreas@mandirisek.co.id +6221 526 9693
Boy Triyono Jakarta boy.triyono@mandirisek.co.id +6221 526 5678
Dhanan Febrie Handita Bandung dhanan.handita@mandirisek.co.id +6222 426 5088
Yogiswara Perdana Yogyakarta yogiswara.perdana@mandirisek.co.id +62274 560 596
Widodo Solo widodo@mandirisek.co.id +62271 788 9290
Linawati Surabaya Linawati@mandirisek.co.id +6231 535 7218
Ruwie Medan ruwie@mandirisek.co.id +6261 8050 1825
Aidil Idham Palembang aidil.idham@mandirisek.co.id +62711 319 900
Yuri Ariadi Pontianak yuri.ariadi@mandirisek.co.id +62561 582 293
INVESTMENT RATINGS: Indicators of expected total return (price appreciation plus dividend yield) within the 12-month period from the date of the last
published report, are: Buy (15% or higher), Neutral (-15% to15%) and Sell (-15% or lower).
DISCLAIMER: This report is issued by PT. Mandiri Sekuritas, a member of the Indonesia Stock Exchanges (IDX) and Mandiri Sekuritas is registered and
supervised by the Financial Services Authority (OJK). Although the contents of this document may represent the opinion of PT. Mandiri Sekuritas, deriving its
judgement from materials and sources believed to be reliable, PT. Mandiri Sekuritas or any other company in the Mandiri Group cannot guarantee its
accuracy and completeness. PT. Mandiri Sekuritas or any other company in the Mandiri Group may be involved in transactions contrary to any opinion herein
to make markets, or have positions in the securities recommended herein. PT. Mandiri Sekuritas or any other company in the Mandiri Group may seek or will
seek investment banking or other business relationships with the companies in this report. For further information please contact our number
62-21-5263445.
ANALYSTS CERTIFICATION: Each contributor to this report hereby certifies that all the views expressed accurately reflect his or her views about the
companies, securities and all pertinent variables. It is also certified that the views and recommendations contained in this report are not and will not be
influenced by any part or all of his or her compensation.

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FOCUS | XXX

Company Update | XX XXXXX 2013

Mandiri Sekuritas Analyst Build, Connect, Boom!

Please see important disclosure at the back of this report Page 1 of 31

Re-initiate JSMR with a Buy rating and PT of 7,700

FIGURE 1. JSMR KEY VALUATION METRICS

Please see important disclosure at the back of this report Page 2 of 31

Organic Growth: Interconnectivity and Tariff Integration

We note several interconnectivity cases in Indonesia, such as when Solo–Ngawi segment

Solo - Ngawi Ngawi - Kertosono

Please see important disclosure at the back of this report Page 3 of 31

FIGURE 6. CONNECTIVITY IMPACT TO GEMPOL–PASURUAN FIGURE 7. CONNECTIVITY IMPACT TO SBY–MOJOKERTO AFTER

Gempol - Pasuruan Surabaya-Mojokerto

FIGURE 8. CONNECTIVITY IMPACT TO MEDAN–KUALANAMU– FIGURE 9. CONNECTIVITY IMPACT TO SURABAYA–GEMPOL

Please see important disclosure at the back of this report Page 4 of 31

FIGURE 10. JORR 2 DEVELOPMENT PLAN MAP

Tariff Integration to Lift Up the Overall Revenues

1. Jakarta–Tangerang toll road, implementing tariff integration in 2Q17. One of JSMR’s

Please see important disclosure at the back of this report Page 5 of 31

Jakarta - Tangerang Jakarta - Tangerang

ASP Traffic growth (%) Revenues growth (%)

8 +34% avg increase

Please see important disclosure at the back of this report Page 6 of 31

ASP Traffic growth (%) Revenues growth (%)

+106% avg increase +38% avg increase

3 Avg. Pre Integration: 2.70

‐24% ‐20% ‐5%

ASP Traffic growth (%) Revenues growth (%)

Please see important disclosure at the back of this report Page 7 of 31

3,000 ‐25% 400

ASP Traffic growth (%) Revenues growth (%)

5. Jakarta–Cikampek toll road, implementing tariff integration in 2Q19. Lastly, the

Please see important disclosure at the back of this report Page 8 of 31

‐7% ‐7% ‐6% 600 0%

ASP Traffic growth (%) Revenues growth (%)

Please see important disclosure at the back of this report Page 9 of 31

4 inflation 2-yr 8.2%

Pre tariff integration Post tariff integration Inflation

Source: Company, Mandiri Sekuritas estimates

FIGURE 32. JAS A MARGA’S TOLL ROADS PROJECT IRR SUMMARY

Source: Mandiri Sekuritas estimates

Please see important disclosure at the back of this report Page 10 of 31

Entering a High EBITDA Growth Cycle

FIGURE 33. JSMR’S SOLID REVENUES AND TRAFFIC GROWTH

Source: Companny, Mandiri Sekuritas estimates

Please see important disclosure at the back of this report Page 11 of 31

60,000 9,360 10,000

30,000 3,864 5,000

Please see important disclosure at the back of this report Page 12 of 31

Parent Subsidiary Greate Jkt Non Jkt

1,000 10,471 20%

FIGURE 42. JSMR’S TRAFFIC PER TOLL ROADS – MANSEK’S FORECAST

Please see important disclosure at the back of this report Page 13 of 31

Number of traffic (mn vehicle)

Please see important disclosure at the back of this report Page 14 of 31

Average revenue per traffic (Rp / vehicle)

Please see important disclosure at the back of this report Page 15 of 31

1. Jakarta–Cikampek elevated toll road for Rp3.9tn

We are a supporter of Probolinggo–Banyuwangi’s gradual development to minimize the

Please see important disclosure at the back of this report Page 16 of 31

FIGURE 48. JSMR’S TOLL ROADS DEVELOPMENT SCHEDULE AND CAPEX

2015 2016 2017 2018 2019F 2020F 2021F 2022F (20,000)

30,000 3,864 5,000 (25,000)